Alaska Air pledges to retain Hawaiian Air’s ‘distinctive’ branding, routes in $1.9B acquisition

HONOLULU (HawaiiNewsNow) - Alaska Airlines announced Sunday that it will acquire Hawaiian Airlines for $1.9 billion, in news about one of Hawaii’s biggest companies that left many reeling and looking for answers on how the deal would impact customers and employees long-term.

In a news conference Sunday afternoon, Alaska Airlines CEO Ben Minicucci sought to deliver a reassuring and culturally-sensitive message, pledging to retain Hawaiian Air’s branding.

“This combination will allow us to better serve the people of Hawaii ... and create an even stronger airline. We also feel a great sense of responsibility to combine in a way that honors Hawaiian Airlines legacy,” Minicucci said, adding Hawaiian Air will remain a top employer in the islands.

“The culture element is so important that we decided early on that the Hawaiian Airlines brand will remain, not only in name but also in the distinctive branding at airports. This is a departure from what the industry does. We need to respect the culture and legacy that’s been created here.”

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He added that the merged airline will seek to retain service, including key inter-island routes.

“Together, we will be stronger, better able to compete,” he said.

Under the merger deal, Alaska Airlines will acquire Hawaiian Airlines for $18 per share for a transaction value that includes $900 million of Hawaiian Airlines’ net debt.

Alaska Air and Hawaiian said the combined company will benefit customers by offering more connectivity, a greater choice of destinations and a stronger platform for both companies. But analysts also expected the Biden administration would show some skepticism about the deal.

Minicucci brushed off regulatory concerns, saying the deal is “pro-consumer.”

Hawaiian Airlines President and CEO Peter Ingram said the decision to merge “wasn’t difficult.”

“This is the biggest announcement in Hawaiian’s history and that’s saying a lot for a 94-year-old company,” he said. “We foresee growth and opportunity” for customers and employees.

Meanwhile, Gov. Josh Green promised to monitor the merger closely.

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“The Attorney General and I will be monitoring the merger/acquisition very closely,” he said. “Both Alaska Airlines and Hawaiian Airlines are very high-quality companies, but ultimately, I will be watching to make sure all of our state’s needs are met and all of our workers are cared for.”

The proposed merger comes after a rocky period for Hawaiian, which has struggled to emerge from the pandemic with travel from Japan still below pre-COVID levels. Earlier this year, Hawaiian also generated negative headlines for a system upgrade that stranded hundreds of customers.

The deal has been approved by the boards of both companies, but still requires the approval of Hawaiian Holdings shareholders. It will also need the blessing of U.S. regulators, which have resisted more airline consolidation out of fear it could ultimately lead to higher airfares.

The combined company would keep both airlines’ brands — rooted in the nation’s 49th and 50th states — and the companies also said they would keep Honolulu as a key hub. Additionally, they said they’re “committed to maintaining and growing union-represented workforce” in Hawaii.

CONTINUING COVERAGE:

• Analyst: Hawaiian Air acquisition comes after rocky period for company
• For passengers, news of Hawaiian Air merger spurs trepidation — and optimism
• ‘A change in our Hawaii fabric’: Lawmakers, employees react to Hawaiian Air acquisition
• Loyalty benefits, routes: Here’s what we know about the Hawaiian Air merger so far

The announcement means Alaska Air — the fifth largest U.S. airline — will expand to a fleet of 365 narrow and wide-body airplanes, but Ingram stressed that nothing will change for now.

“While there is a lot to be excited about, today is just day one. There are approvals that are required to complete this combination, which we expect to occur in the next 12-18 months.

“Until then, it’s business as usual, and Hawaiian and Alaska Airlines will continue to operate as independent airlines. We look forward to sharing reliable, hospitable service across our network.”

The Association of Flight Attendants, which represents over 6,800 flight attendants at Alaska Airlines and 2,200 flight attendants at Hawaiian Airlines, says their union will continue to press forward in negotiations at Alaska Airlines and are seeking more details on the merger.

The union for pilots at Hawaiian Air shared a similar message.

Meanwhile, the CEOs of both airlines said all union members at Hawaiian would have job protection.

Hawaiian has about 1,400 non-union employees, however, and the airlines said It is “too soon to tell” how many would be retained. Alaska Airlines CEO did say there “can’t be two CEOs.”

“There is going to be some duplication in roles that we’re going to have to address,” he said.

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